The Crown corporation says that over the last six years, approximately 240,000 optional insurance customers were overcharged and it will reinburse them.
ICBC says the average overpayment was $21 each year per customer and estimates that it will be paying back $36 million plus an additional $3 million in interest.
On the other hand about 350,000 optional insurance customers over the last six years were billed too little.
The company says that the underpayments total about $71 million and they work out to about $34 each year per customer, but ICBC will not be seeking to recoup the uncollected money.
The foul-up is expected to cost the auto insurance company $110 million.
“We are going to ensure all of our customers who overpaid on their optional insurance over the last six years receive full refunds with interest,” said Mark Blucher, president and CEO of ICBC in a written statement. “The modernization of our systems will ensure this doesn’t happen in the future and we sincerely apologize for any inconvenience this has caused our customers.”
Optional insurance coverage includes collision coverage, comprehensive coverage, specified perils, new vehicle replacement plus, replacement cost endorsement and limited depreciation policy.
B.C.'s transportation minister Todd Stone says he was mad himself when he found out about the issue in February and told the public auto insurer it had to pay back the $39 million overcharged with interest.
The issue became public after a report in the Vancouver Province newspaper on Sunday. Stone says ICBC was keeping quiet on the issue because it was still trying to gather information on the matter.
"They're methodically going through those millions of individual transactions to make sure that they get their facts straight," said Stone. "It was felt a public announcement of this would best be made once they had the scope clearly understood."
He says he's told the Crown corporation it can't raise rates to recoup the money or require those who were undercharged to pay retroactively.
"Anyone who has underpaid will not be retroactively charged," said Stone "This was not their error so they should not be asked to pay retroactively."
Stone says the company must undergo a third party audit to make sure the problem has been fixed.
He says the issue started during an ICBC system upgrade when a number of vehicle identification codes were incorrectly entered.
"I expect the system to be fixed so this never happens again," he said. (CHNL)
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